Lippo's Assets in Greater Jakarta - Photo by Lippo Karawaci

JAKARTA (TheInsiderStories) – Indonesia’s largest and most diversified conglomerate Lippo Group confirmed it will sell around 70 percent shares in PT Visioner International (OVO), said Lippo’s management to the media on Thursday (11/28). Previously, the group had denied that they would sell their shares in OVO.

“We still hold 30 percent of remaining shares. So they do not take off entirely,” Founder of Lippo Group Mochtar Riady said.

The divestment of OVO is due to the financial burden of Lippo Group because the group can not afford to implement a burn money strategy to develop OVO. Even though, other e-wallet platforms have implemented the same method of marketing.

OVO has applied the burn money strategy and even bigger until 60 percent discount to the customers. The rumor said the promotion of the financial needs for burn money strategy reached US$50 million a month.

Lippo in their official statement denied this issue before. Director of Lippo Group Adrian Suherman said, the divestment entirely was not in line with company strategy. Therefore, the rumor said Lippo will leave OVO was not true and baseless.

He said Lippo and other shareholders will support OVO’s development. It is because OVO has proven its existence in supporting the government’s goal to increase financial inclusion.

Meanwhile, OVO has led the digital payment transaction during the first half of 2019, based on the Bank Indonesia latest report. The arms of Grab Indonesia and local tycoon Lippo Group acquired 37 percent market share, while the main competitor GoPay holds 17 percent of the total national market.

The data shown the total digital payment transaction value for that period was about $4 billion. The OVO’ transaction recorded $1.49 billion and GoPay $680 million. The other players, Dana and LinkAja contributed 10 percent and 3 percent, respectively.

The rest of it derived by e-money owned by banks like PT Mandiri Tbk (IDX: BMRI) and PT Bank Central Asia Tbk (IDX: BBCA). In a recent study, Snapcart also claimed that OVO is the top e-wallet app in Indonesia.

The survey revealed that 58 percent of respondents like to using OVO as their favorite digital payment application. Other application-based digital wallets, namely GoPay 23 percent, DANA 6 percent, and LinkAja percent. The remaining digital wallet like 12 percent of respondents namely Flazz, Brizzi, and Mandiri e-Money.

For the retail transaction segment, OVO is used by 63 percent of respondents and Go-Pay by 28 percent of respondents, followed by DANA by 7 percent and LinkAja 1 percent. At present, OVO has been accepted at around 500,000 merchants. While Go-Pay mentions the number of 300,000 merchants. LinkAja has also recently provided 130,000 merchants and FUNDS can be accepted at more than 13,000 merchants.

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